Romanian company as Austrian resident

[Zuzuud]

8Hello,

As you remember I considered to move a new country. Austria wasn't on my map earlier, but it seems I am going to move there after all. (at least for a year)

My question is that if I own a Romanian microenterprise how much tax should I pay? (after 3% on income, if I don't have an employee) I have checked DTT and I think if Romanian microenterprise pays a dividend to an Austrian tax resident person the WHT is 5% in Romania. And in this case, do I have to pay anything else on Austrian side or not? I am not sure about it. If yes, then how much?

And my second concern is about if I travel to Romania doing business (consulting, invoicing) for a few days per month, so I am not running this business from Austria in the real-life, is that protected against CFC rules?

Thank you

 

[Sols]

Because you are the UBO of the company and control the business activities from the Austria, the company becomes tax resident in Austria, so you will have to pay Austrian corporate tax. You might be able to use the DTT between Austria and Romania to offset taxes paid in Romania as tax credit in Austria. The taxes paid in Austria would probably be 25% of your profits minus 3% of your revenue.

Going to Romania a few times a year is not going to change anything. If Austria is your primary home, the Austrian authorities will seek to tax you.

As for dividends, it's 5% in Romania and then whatever the applicable for dividends as income in Austria. But once again, you can probably use the DTT to offset the taxes paid in Romania.

Discuss with a local tax adviser/attorney, but these setups generally don't work to save on taxes legally.

 

[i888]

If you want to take advantage of the low taxes in Ro, you should move to Romania, at least for the minimum period of time to be considered resident.

A little workaround would be the co pays profit at the end of the year but doesn't make the distribution of the taxed profits, reinvest it.